Trade Gap
Ben Margot/AP
By Lucia Mutikani

WASHINGTON -- The U.S. trade deficit narrowed in October as exports hit a record high, pointing to a pick-up in global demand that should help to support domestic growth in the fourth quarter.

The Commerce Department said Wednesday the trade gap fell 5.4 percent to $40.6 billion. September's shortfall on the trade balance was revised to $43.0 billion from the previously reported $41.8 billion.

Economists polled by Reuters had expected the trade deficit to narrow to $40.0 billion in October.

When adjusted for inflation, the trade gap fell to $48.3 billion from $51.4 billion the prior month. This measure goes into the calculation of gross domestic product and suggested trade will again contribute to growth this quarter.

The three-month moving average of the trade deficit, which irons out month-to-to month volatility, inched up to $40.9 billion in the three months to October from $40.2 billion in the prior period.

An improving global economy is boosting demand for U.S. exports.
In October, exports increased 1.8 percent to $192.7 billion. That was the highest on record and snapped three straight months of declines in exports.

Petroleum exports were the highest on record in October. Exports to China hit a record high as did imports from that country. Still, the trade deficit with China narrowed in October.

China has been one of the fastest-growing markets for U.S. goods, though the pace of export growth slowed in recent months.

Exports to Canada and Mexico also reached all-time highs in October. While exports to the 27-nation European Union rose, they were outpaced by imports, resulting in a record trade deficit.

Overall imports rose a modest 0.4 percent to $233.3 billion in October, the highest in 1½ years. With consumer spending slowing significantly in the third quarter and stocks piling up in warehouses, businesses are probably wary of bringing in too many goods from overseas.

The slowdown in import growth could limit the drag on the economy from an anticipated inventory drawdown in the fourth quarter.

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The one-two punch of the sequester and the government SLOWdown strikes again.

December 04 2013 at 2:18 PM Report abuse -1 rate up rate down Reply

For all those who claim all the new jobs are burger-flippers and wait-staff: what's the $192 billion in October consist of: 30 billion Quarter Pounder meals to go?

December 04 2013 at 12:13 PM Report abuse +1 rate up rate down Reply
1 reply to pgile's comment

The biggest component of the improvement in exports was crude oil and petroleum-based products. In fact, driven by technological innovation such as horizontal drilling and fracking, petroleum product exports are now almost 8 times higher than they were in October 2005.

If failed US energy policies were remedied, the pipeline and refinery issues that inhibit even faster growth in petroleum exports could be fixed. Then, even more of these high-paying jobs could be created, while the US would become a net petroleum product exporter before the end of the decade.

December 04 2013 at 2:31 PM Report abuse -1 rate up rate down Reply